Laos’s controversial Xayaburi dam is 30 per cent built, its government has told the Post.

Deputy Energy and Mines Minister Viraponh Viravong said the project – which Laos began work on without regional approval in November 2012 – remains on track to be functioning in 2019.

“The project is currently 30 percent complete, and proceeding on time and on budget,” Viravong said in an email.

The $3.8 billion dam, on the Mekong mainstream in the country’s north, is the first of about 10 dams Laos has planned for the river and which conservation groups warn will decimate Cambodia’s fish stocks.

But Viravong defended the dam, saying hydropower “is a natural choice for Laos”.

“It’s sustainable and can continue to bring benefits to our people for decades to come.”

Laos, Viravong added, has over the past 50 years “built an enviable record of achievement in developing environmentally and socially sustainable hydropower projects in accordance with our laws, decrees and globally accepted standards”.

But its government has been accused of being a law unto itself. When Laos broke ground on Xayaburi, fellow Mekong River Commission member states Cambodia and Vietnam were still asking it to assess potential trans-boundary effects. Under the 1995 Mekong Agreement, Laos must have the blessing of its co-members before it can build on the mainstream.

Thailand, the fourth MRC member and the country set to buy most of Xayaburi’s electricity, has remained relatively quiet about the 1,285-megawatt dam – which is being built by Thai developer CH. Karnchang.

Viravong said Laos would continue with its hydropower vision out of “duty” to overcome poverty and said it had the World Bank on its side.

“The World Bank has recently underscored the wisdom of using large-scale hydropower projects to create renewable energy, spur economic growth and social progress, and alleviate poverty in the least developed countries.”

But a World Bank spokesperson in Cambodia yesterday said the bank did not support the Xayaburi dam. In 2010, the World Bank said it would not invest in or finance projects on Mekong’s mainstream.

Last May, the bank said it was recommitting to large-scale hydropower development in Southeast Asia, without mentioning the Mekong.

Ame Trandem, Southeast Asia program director for conservation group International Rivers, said steps could still be taken to prevent Xayaburi from causing irreparable damage, but time “is running out”.

“There is still essentially one year left to stop the dam, as construction on the Xayaburi Dam’s final dam across the Mekong River will begin in February 2015,” she said.

“With the Mekong Summit approaching [next month], it’s critical that the Mekong countries rise up to their commitments and demand that Laos stop all further construction until … mitigation measures can be proven to work.”

CK Power chairman Thanong Bidaya (fourth right) celebrates the company’s first day of trading on the SET with Ch. Karnchang chief executive Plew Trivisvavet (third right) and SET chairman Sompol Kiatphaibool (fourth left).

Ch Karnchang Pic, Thailand’s third largest contractor by market value, is set to sign a development agreement for the THD 17 billion Nam Bak power project in Laos next month.

The signing with the Laotian government in Vientiane on August 8th will pave the way for a concession agreement, with construction due to begin later this year.

The 160 MW plant will be the third hydropower project of holding company CK Power Pic in Laos following the Nam Ngum 2 and Xayaburi projects.

With a capacity of 1,285 MW, Xayaburi is scheduled to operate in 2019.

Ms Supamas Trivisvavet MD of CKP said that the company is studying the possibility of investing in new power projects in neighboring countries with a combined capacity of 1,000 MW.

Ms Trivisvavet said that it plans to have capacity of 2,300 MW in the next 5 to 6 years and more than 4,000 MW by 2023.

However, CKP expects revenue will more than double to THD 5.4 billion this year from 2.5 billion in 2012 thanks to full year revenue realization of Nam Ngum 2 and the new Bang Pa-in co-generation power plant in Ayutthaya.

Ms Supamas comments were made as CKP shares started trading on the Stock Exchange of Thailand yesterday as the first Thai company with core operations abroad to list on the bourse.

Mr Plew Trivisvavet CEO of Ch Karnchang said that the offering supports the growth potential of CKP, which has stable income from long-term power purchase agreements. The company is determined to expand investments in alternative and clean energy.

THE Mekong river, snaking its way through the heart of South-East Asia, has long sustained the world’s biggest and most productive inland fishery, supplying protein for around 65m mainly poor people from four riparian countries, Laos, Thailand, Cambodia and Vietnam. But scientists warn that this ecosystem is gravely threatened by the Lao government’s rush to exploit its water resources, egged on by Thai, Chinese and European energy companies.

The decision by Laos to push ahead with the giant Xayaburi dam makes it the first of what could prove to be a cascade of 11 proposed dams on the lower Mekong. Because the decision fails to take account of the consequences for downstream countries, it has raised tensions with neighbours. Having long pretended otherwise, the Lao government recently asserted that construction was forging ahead, and indeed was on schedule. That prompted a warning from the president of Vietnam, Truong Tan Sang, that “tensions over water resources are not only threatening economic growth in many countries, but also presenting a source of conflict”.

Cambodia and Vietnam have jointly called upon Laos to observe an agreement in December 2011 by the Mekong River Commission (MRC) to wait for further scientific study about the impacts of dams on the lower Mekong (dams already exist much higher up, in China, but their downstream impacts are limited). The MRC, made up of the four riparian states, is supposed to operate within a framework of mutual co-operation and consultation. But with a consortium of Thai banks backing Ch. Karnchang, the Thai construction company behind the dam, there is in effect an alliance between Thailand and Laos, dividing the commission down the middle.

With the MRC in disarray, some hope that an Asia-Europe summit in the Lao capital, Vientiane, on November 5th-6th will provide a chance for governments opposed to the Xayaburi dam to put pressure on the host nation. Many marvels of the Mekong face being wiped out, including the Mekong giant catfish and the Irrawaddy dolphin, as well as the spectacular Khone waterfall. Scientists say the stakes could not be higher. Philip Hirsch at the University of Sydney predicts that the loss of the fish catch for millions of Asia’s poorest people will prove larger than the entire freshwater catch of Europe and West Africa combined.

The United States and Finland, the largest donor to the MRC, are among nations urging Laos to wait for more scientific data on the likely transboundary impacts. The Lao energy ministry has turned for justification to the work of international energy firms that include Colenco, a Swiss consultancy, Poyry, a Finno-Swiss power company, and Team Consultants of Thailand. But Jian-hua Meng of the WWF, a conservation group, argues that the standard of work done by Colenco for the Xayaburi proposal would be “highly unlikely” to be acceptable back in Switzerland. Meanwhile the Finnish parent company of Poyry has been blacklisted for corruption by the World Bank, and NGOs have urged Finland to investigate the Swiss arm for alleged violation of OECD guidelines in dealing with the Lao government.

Vientiane, Laos — Laos’ energy minister announced last week that the country will sell energy supplied by the controversial Xayaburi Dam to Cambodia. It is already planning to sell power to Thailand, where last month a lawsuit was lodged to stop the country from buying electricity produced at the dam because of environmental and other concerns.

The Lao minister, Soulivong Daravong, also denied claims that Vietnam and Cambodia oppose construction of the dam. He insisted that the project will not be shelved.

His comments to journalists on the sidelines of a meeting of the Association of Southeast Asian Nations (ASEAN) in Phnom Penh on September 12 created confusion about the future of the $3.5 billion USD project, the first of 11 planned dams on the Lower Mekong River’s main stream.

Two months ago, at an ASEAN ministerial meeting, Laos’ Foreign Minister Thongloun Sisoulith declared that the dam project was shelved pending further studies, winning praise from many delegates.

But the official Vientiane media told another story, saying the government will still let Thai developer Ch. Karnchang pursue “scheduled” building site action, including resettlement of villagers.

Independent analysts who assessed the development site confirmed that construction continues.

On September 9, speaking at a Xayaburi Dam workshop in Bangkok, Montree Chantawong of Thai-based NGO Towards Ecological Recovery and Regional Alliance (TERRA) said his estimates of those impacted by the dam are much higher than the Laotian government’s. His explanation: The dam will cause flooding both downstream and 150 kilometers upstream towards Luang Prabang.

“The Lao government has talked about only the 2,000 people in 10 villages that will be relocated, but there are more than 20,000 people in about 30 villages from the dam site all the way to Luang Prabang who will also be affected,” Radio Free Asia quoted him as saying.

The downstream flooding looks set to raise the river’s water level by at least 3 meters, he said.

The Xayaburi is just one of a series of hydropower dams planned for the Mekong. There are 11 planned dam projects on the Mekong mainstem, and another 77 dams planned in the basin by 2030.

Hydropower dams planned for the lower main stream of the Mekong River could devastate fish populations and with them the main protein source for 60 million people, according to a study by international conservation organization WWF and the Australian National University.

The construction site of the Xayaburi Dam on the Mekong River in Laos.Photo: International Rivers / flickr

The Thai developer of the US$ 3.5 billion Xayaburi hydropower dam in Laos says the Laotian government never sent a formal letter asking it to stop construction of the dam, which has prompted serious concerns from Cambodia and Vietnam that it will damage the ecology and livlihood of the region.

On July 13, the Laotian government said work had stopped after neighbors’ Cambodia and Vietnam said the 1,285-megawatt dam would harm the economy along the river and damage the fishery, which is heavily relied upon as a food source.

“We are still working on the project. We haven’t received a formal letter from the Lao government that we should suspend or put the project on hold,” Plew Trivisvavet, the chief executive Officer at Thailand’s Ch Karnchang Pcl, told reporters, according to a Reuters news agency article on Thursday.

The government of Laos made no immediate comment regarding the report.

The dam would be the first along the main stream of the Mekong in Southeast Asia.

The Mekong River Commission, comprising Cambodia, Laos, Thailand and Vietnam, have said that member governments agreed to approach the Japanese government and other international development partners to further study the dam’s implications before giving Laos the go-ahead to continue construction.

Plew said Ch Karnchang, the dam’s main contractor, expects to begin construction of a reservoir at the site later this year. “We have entered the area for some relocation work and to prepare for the construction of the reservoir,” he said.

Meanwhile, the Vietnam News Service (VNS) on Thursday said Vietnamese experts have again called for a moratorium on dam building on the Mekong River, saying the lives of as many as 60 million people could be adversely impacted by the dams.

Two key economic sectors in Vietnam’s fertile Mekong Delta, would suffer critical losses in rice and seafood production, said conservationists.

Dr. Dao Trong Tu, a former member of the Viet Nam Mekong River Committee, said the river runs across six countries, and that dams on its upper reaches would have harmful impacts on a vast area of the river basin.

Daniel King, Southeast Asia Legal Director of Earth Rights International, said there was a need to strengthen regional institutions to improve implementation of a common legal framework on exploitation of the river, according to VNS.

“In addition to making findings and recommendations on the environmental and social impacts of the 11 dams, the Mekong River Committee should identify critical shortcomings that should be addressed prior to any dam construction on mainstream Mekong,” he said.

It is the first of 11 dams planned in the lower Mekong that are projected to generate 8 percent of energy-hungry Southeast Asia’s power by 2025.

The proposed 11 dams would turn 55 per cent of the river into reservoirs, resulting in estimated agricultural losses of more than $500 million a year and cutting the average protein intake of Thai and Lao people by 30 per cent, according to a study by the Mekong River Commission.

China has completed four dams on the upper river, closer to its source. Activists say they were responsible for a 2010 drought that sent lower Mekong water levels to their lowest in half a century.

Ch Karnchang’s 50 per cent-owned subsidiary, Xayaburi Power Co, has received a 29-year concession contract from the Laotian government to operate the dam’s power plant.

Xayaburi Power said it will sell the power to state-run Electricity Generating Authority of Thailand, the country’s sole power distributor, in 2019, Plew said, adding Ch Karnchang anticipated revenue of about 4 billion baht ($127 million) from the project this year.